Co-op Bank’s creditors have voted in favour of a £1.5bn ($2.4bn) bailout deal which will see them take control of 70% of the struggling UK lender.
The remaining 30% will stay in the hands of parent company the Co-operative Group, which said that 99.9% of investors who had voted had approved the plan to plug the gaping hole in the bank’s balance sheet.
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The deal will now need to be approved by a court on 18 December before it can be brought into effect.
The Co-op Group had originally planned to pump £500m capital into the bank, sell its £500m insurance assets and leave bondholders to take £500m of losses before floating the bank on the stock exchange, retaining a controlling 70% stake.
Bondholders rejected these plans and demanded in September that the group retain a stake of smaller than 50%, leaving bondholders in control.
Labour peer Lord Myners is currently chairing a review into the governance of the Co-op Group, after the company was discredited by a series of scandals.
Along with the bank’s financial struggle, it has fallen into disrepute after former chairman Paul Flowers was arrested, allegedly for drug offences.
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By GlobalDataDuring last month, UK Prime Minister David Cameron announced an independent investigation into events at the bank.
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